California embraces job-killing folly

Gov. Jerry Brown signed into law Monday a staggering 50 percent boost in the statewide minimum wage. It will go from the current $10 an hour to $15 by 2022 for companies with more than 25 workers and by 2023 for those with fewer, followed by adjustments reflecting inflation.

New York Gov. Andrew Cuomo signed a similar law Monday. Both states will impose on employers the highest minimum wages in the country. Some cities, such as Seattle, also have raised their minimum wages to $15.

One immediate effect will be to raise the cost of thousands of California government employees. A March 30 report by the staff of the state Assembly Appropriations Committee forecasts the cost of the wage mandate at $3.6 billion a year. That’s money unavailable for schools, health care or paying for the state’s estimated $250 billion in unfunded pension and other liabilities – unless taxes are raised again.

Another cost to taxpayers will be welfare payments for those idled because their companies can’t pay the higher wage. Gov. Brown himself warned in January, “Raise the minimum wage too much, and you put a lot of poor people out of work. There won’t be a lot of jobs. It’s a matter of balance.” Monday, he disregarded his own warning.

Another problem is that California’s $15 mandate is uniform across the state. That means employers in the Inland Empire and other areas with generally lower wages – along with a lower cost of living, especially much cheaper housing – will be forced to pay the same wage as San Francisco and Silicon Valley, where living costs are much higher.

By contrast, other states have enacted lower rates for their less-affluent areas. For example, for New York, according to Think Progress, in most areas of the state, “minimum wages will reach $12.50 at the start of 2021 and then rise on a yet-to-be-determined schedule toward $15.”

Monday, Gov. Brown enthused, “I’m hoping that what happens in California will not stay in California, but spread all across the country.” But how would that help preserve jobs in Mississippi, with a median income of $36,919 (less than half Orange County’s) and a median home price of just $113,100 (compared with $610,000 in O.C.)?

Except for New York and a couple others, few states will follow California’s jobs-killing folly.

Due to a reporting error, an earlier version of this story misstated the source of a report that forecasts California's $15 minimum wage mandate costing state government $3.6 billion a year for its own employees. The report was prepared by the staff of the state Assembly Appropriations Committee.

WRITE A LETTER TO THE EDITOR
Letters to the Editor: E-mail to letters@ocregister.com.
Please provide your name, city and telephone number (telephone numbers will not be published).
Letters of about 200 words or videos of 30-seconds
each will be given preference. Letters will be edited for length, grammar and clarity.

User Agreement

Keep it civil and stay on topic. No profanity, vulgarity, racial
slurs or personal attacks. People who harass others or joke about
tragedies will be blocked. By posting your comment, you agree to
allow Orange County Register Communications, Inc. the right to
republish your name and comment in additional Register publications
without any notification or payment.